Wednesday, January 23, 2008

I mentioned roundabout that I hear Henry Paulson, the U. S. Secretary of the Treasury might be interested in running for governor. He has an estate in Barrington Hills, is 61, was CEO of Goldman Sachs and like a lot of other Goldman Sachs CEOs is interested in public policy. Unlike a lot of them, he is a Republican. Jon Corzine as you know became the U. S. Senator from New Jersey and governor of that state. Robert Rubin became Clintons secretary of the treasury. Paulson who is nearly a billionaire would be almost entirely self-funded so it would obviate going hat-in-hand to the usual GOP sources which exact fearful concessions for their money.

Keynesian Economics.

But probably a central reason for opposing Paulson down the road would be his likely role in formatting the Bush panicky reaction to the so-called recession. Paulson should know that the current view that recession is either hear or about to arrive should be taken with a large dose of salt.

For the life of me I dont understand why George W. Bush is being panicked to go for an economic stimulus package to forestall a recession when the pretext, Keynesian economics, has been so widely disproved. I appreciate why the Congress has been stampeded to this point since they all want to be reelected, but Bush? The idea stems from British economist John Maynard Keynes who believed that spending was the paramount force in the U.S. economy. But his views were hatched during a period of world-wide deflation when deficit spending by governments often appeared to be the only means of getting money into circulation at a time when the markets were beset with lack of liquidity and the Feds efforts were impeded due to the closure of so many banks. It is old-fashioned economics by todays rubric and not very good economics at that. Tax cuts were feared to be inflationary. But economics have come a long way since then. There is no case history showing that tax rebates which Bush supports are effective in kicking starting the economy.

3 comments:

Right now the mood in Washington is that government has to do something. I fear that if the Bush Adm. did not take the lead, the Congress would pass some god-awful thing that Bush would have to veto giving the Dems something to point to in an election year saying that economic woes would not be upon us if only Bush signed the stimulus package they crafted. Wall Street is certainly signalling that to reduce the potential and/or the depth of a recession, gov. needs to cut its spending and cut our taxes. I would not rule out supporting Paulson simply because he was tasked to try and ride this bronco.

I'll take the rebate check (any refund of taxes is welcome) but I agree with your assessment regarding Keynesian economics.

I will have to learn more about Paulson's positions on the issues. All I know about him to date is he is a strong advocate for the environment / fight against global warming. I hope Paulson or someone else can defeat Blago / Lisa come 2010.

800 bucks.....Who would that help? Oh yes all those sub-primers, for example ILLEGALS who were given MORTGAGES... Now the cuties who did the deals and earned the commissions need the party to continue under the guise that "you would not want to descriminate against these folks.... just bill the TAXPAYERS". Hmnnn if the mortgage customer is "UNDOCUMENTED" how do you know anything financial about them? No wonder the UNDOCUMENTED ILLEGALS in Berwyn, Cicero, Elgin, Joliet, Aurora, etc. etc. are in forclosure!

About Tom

Thomas F. Roeser is radio talk show host, writer, lecturer, teacher and former VP of The Quaker Oats Company of Chicago. A former John F. Kennedy Fellow, Harvard and Woodrow Wilson International Fellow, Princeton, N. J., Roeser is theauthor of the book Father Mac: The Life and Times of Ignatius D. McDermott. To read more about Tom, Click here.